If your tax returns have been filed (as most of our clients’ have), I do hope you’ve taken the ripe chance afforded to you to scrutinize your year, and your financial health. And, even if you’re on extension, it’s good to pause here before summer and consider where you’re headed — financially, and otherwise.

So, I thought that this could be the perfect time to help our Louisville tax preparation clients through a little check-up.

(One nifty little tool I ran across last week might also encourage you in your marriage — or, well … it could perhaps give you fuel in that you are doing something worthwhile, even when it comes at a cost!

The stat site, FiveThirtyEight created an interactive graphic to help us see the implications of our tax policy on families (specifically, marriages). Enter you and your spouse’s income, and you can see whether your marital status is providing you a “bonus” or a penalty, under our current, convoluted tax regime. –>http://53eig.ht/1GABRri )

So, even including marital status in the mix, I’d like to give you an objective, “incentive-free” look at what your finances should look like when you hit the half-century mark. If you are close to that mark, I thought it might be useful for me to lay out the “perfect” scenario. If you’re on either side of it, you can see where you’re headed, or from where you should be coming.

And look — if you’re not perfect, at least let it be a benchmark…

[And don’t neglect what I’ve included at the end, especially where your friends may be concerned …]

Kevin Roberts Explores Five Markers of Financial Health at Mid-Life
“Don’t give up. Keep going. There is always a chance that you stumble onto something terrific. I have never heard of anyone stumbling over anything while he was sitting down.” – Ann Landers

Finances should be viewed as “clear-eyed-ly” as possible, don’t you think?

So, that being the case, let’s set up a landmark on our map towards financial health, shall we? It’s great to know where you should be headed … or, from what place you should be coming.

Here are five signposts for your mid-life financial life …

1) Your estate plan should be fully in place.

Of course, various assets are handled differently. This is the time to make a complete review of how your plan is put together, to ensure that EVERY asset (not just the tangible ones) are still handled properly.

Intangible assets can include such things as what you are passing down to your children in terms of “family ways” and values that you would like to see spreading down throughout your generations. This is an important step at midlife.

2) If college is paid for, consider dropping term insurance.

At this stage of life, it becomes more costly to pay for this service. You are probably at the point where your children are nearing the completion of their education.

Remember that you purchased “peace of mind” (term insurance is not an investment) so that if anything were to happen to you, your home and your children’s education could be paid for. If those things are now moot, it may be time to re-evaluate.

3) Evaluate where you are with your saving and investing.

You may not want to retire for quite some time yet. That’s a wonderful place to be. But you should be considering whether you have saved up enough to match your desired lifestyle spending. It’s a good rule of thumb that you should have saved about 8-10 times your annual lifestyle spending at this point.

If you haven’t?

4) Catch up on your savings.

At age 50, maximum savings in a 401(k) or 403(b) account increases from $18,000 to $24,000 in 2015 (it was $500 less for each amount in 2014). At age 50 or older, Roth contributions also increase from $5,500 a year to $6,500 with these “catch-up” provisions. If we don’t have eight times our lifestyle spending saved, now is the time to press these limits.

Of course, saving well is half the battle; investing well is the other half.

That’s a subject for another day.

5) Lastly, begin considering what you really want out of retirement.

Consider that living a life of purpose doesn’t necessarily mean decades of simple recreation.

Reaching the place where you don’t “have” to work is a wonderful marker of true financial success. But you can make the decision to view your retirement years as an opportunity to do new, meaningful work. Commit yourself to a non-profit, or a ministry endeavor. Find ways to strategically invest your time and your energy into a different work that matters (aside from your first-half career).

Although you can have that attitude at any age, it is especially powerful when redefining the second half of your life.

And don’t forget to email me (you can use the email button at the top of this page) a quick note about your experience with us this year! THANK YOU!

And for those of our clients who have previous years’ tax returns at another preparer, OR for their friends…

“No Charge” Return Review
Special Offer
As a complimentary service this year, we will provide a Return Review To Any Non-Client. We will also review prior year returns from clients who did NOT have us handle their taxes during the year under question. No charge will be made, unless we have to file an amended return. Email our office (using the email button at the top of this page) or call (502) 426-0000 to set up this complimentary service!
Deadline May 8th

To more of your money staying in your wallet…

Kevin Roberts
(502) 426-0000

Roberts CPA